Airport moved to privatisation list

Govt shelves Islamabad airport outsourcing plan as talk with UAE stall

ISLAMABAD:

The government has shelved a plan to outsource the management and operations of Islamabad International Airport to the United Arab Emirates (UAE) after Abu Dhabi lost interest in the process.

The deadlock between the two countries emerged following repeated delays by the UAE in nominating an entity for the outsourcing of Islamabad International Airport.

The government has now approved a proposal to include Islamabad International Airport in the active privatisation list following the recent successful privatisation of Pakistan International Airlines (PIA).

Sources told The Express Tribune that despite initial interest shown by the UAE, it failed to communicate the name of the nominated entity for the outsourcing of the management and operations of Islamabad International Airport, indicating disinterest on the part of the UAE.

Official sources said the Pakistani side had sought a clear response from the UAE by sending a final call letter. In response, the UAE conveyed that it was still unable to confirm any nominated entity.

It further said the UAE was not interested in continuing the process. Consequently, the government approved a proposal to include Islamabad International Airport in the active privatisation list, following the example of the highly successful privatisation of Pakistan International Airlines.

Earlier, the government had not acceded to the UAE's request for inclusion of Jinnah International Airport (JIAP), Karachi, and Allama Iqbal International Airport (AIIAP), Lahore, in the draft government-to-government (G2G) framework agreement.

Moreover, the Government of the UAE's request for privatisation of the air link between Abu Dhabi and Pakistan under the draft G2G framework agreement was not backed by the government of Pakistan.

The government had also constituted a negotiation committee under the chairmanship of the Adviser to the Prime Minister on Privatisation and had directed the relevant ministry to continue engagement with the UAE side for outsourcing of Islamabad Airport only. The Government of the United Arab Emirates had also conveyed its interest through its embassy in Islamabad in the management and operation of Islamabad International Airport.

The government had directed the ministry to seek clarity from the UAE side on the nominated entity to be mentioned in the draft framework agreement, while the Pakistan Airports Authority (PAA) had been nominated from the Pakistan side.

Multiple draft agreements were exchanged between the Pakistan Airports Authority and the UAE side. A delegation led by the Adviser to the Prime Minister on Privatisation, along with senior officers from the concerned ministries, also visited Abu Dhabi to hold meetings with UAE officials to discuss and finalise the draft framework agreement.

Meanwhile, the Privatisation Division submitted a summary to the Cabinet Committee on Privatisation (CCoP) proposing the inclusion of Islamabad, Karachi and Lahore airports in the active privatisation list for outsourcing.

The cabinet body approved the inclusion of Karachi and Lahore airports in the list, while Islamabad Airport was excluded for the time being.

The concerned ministry was also directed to seek a final response from the Government of the UAE within one week on its intent regarding the ongoing G2G process for outsourcing Islamabad Airport.

The UAE side conveyed that it was unable to specify the name of the nominated entity at that stage, stating that the commercial and technical governance requirements associated with the G2G framework agreement needed to be finalised first, after which the nominated entity would be shared.

In this regard, the concerned ministry argued that persistent delays by the UAE in nominating an entity were hampering the government's efforts to outsource the management and operations of Islamabad International Airport.

The ministry proposed that the G2G transaction under the draft framework agreement with the UAE for Islamabad International Airport be closed and that the airport be included in the active privatisation list along with Karachi and Lahore airports.